P&O boosted by stake in partner

BILLIONAIRE John Fredriksen sparked takeover speculation in the shipping industry last week after taking a near-7% stake in Nedlloyd, the Dutch group that partners Britain's P&O in a container shipping business.

Some traders were hopeful that the shipping magnate's buying could herald a bid for Nedlloyd and so boost the value of P&O investments in it. The stake-building comes at a crucial time for the two companies as they plan a restructuring of their joint business.

The pair are 50-50 partners in the container business P&O Nedlloyd. But P&O has agreed to sell its stake to Nedlloyd for £170m and a 25% stake in the Dutch company.

Some traders have speculated that Fredriksen could approach P&O to offer to buy its shares. A spokeswoman for P&O declined to comment other than to say executives were 'comfortable' with Fredriksen's interest in Nedlloyd.

Norwegian-born Fredriksen, who owns a £40m in house in London as well as homes in Oslo, Cyprus and Marbella, is behind the giant Frontline shipping group. But he has taken his stake in Nedlloyd through a separate investment company, Hemen Holdings. Shares in Nedlloyd rose 1.6 euros (107p) to 36.6 euros last week.

P&O's shares were up 6 1/4p to 235 3/4p, helped by the Fredriksen speculation, but also by full-year results that showed the ports and ferries company returning to the black. Profits were £80m last year in contrast to a loss of £136m in 2002.

The group saw performance improve at ports around the world, but suffered from tough times in its North Sea ferries business. Chairman Lord Sterling announced a complete review of the ferry operations.